OAKLAND — Former Hercules City Manager Nelson Oliva, fighting the city’s effort to recover $3.2 million from him and his family, says officials knew and approved everything he did during his four-year tenure and that it is he who is owed more than $100,000 by virtue of a separation agreement.

In an answer filed Monday in Alameda County Superior Court in Oakland to the First Amended Complaint by Hercules and its former redevelopment agency, Oliva denies that he damaged the city and asserts that even if he did, the city could not recover any money from him because it acted recklessly, negligently and with willful misconduct. The brief does not go into details of the city’s supposed missteps.

In a cross-complaint, Oliva seeks $112,500 plus interest from the city, alleging it breached a Dec. 21, 2010, separation agreement that called for Oliva to step down and the city to pay him one year’s base salary, or $225,000, in two installments. The city paid Oliva the first installment, due Jan, 21, 2011, but withheld the second, due by July 21, 2011.

By then, officials had come to realize the depths of the city’s financial plight, first announced by Interim City Manager Charlie Long in late 2010 during a 50-day stint while Oliva was on medical leave, and largely blamed on Oliva’s financial dealings. Long had found that the city lacked the cash to pay for municipal services and that the redevelopment agency could not meet its obligations.

Hercules sued Oliva, daughters Taylor, Gabrielle and Adrianna Oliva, and the family company, Affordable Housing Solutions Group/NEO Consulting Inc., in Contra Costa Superior Court in August 2011. Oliva, who by then had moved back to San Bernardino County, applied for a change of venue, and a Contra Costa judge moved the trial to Alameda County.

The city’s complaint alleges that the Olivas violated a section of the California Government Code that bars public officials from having a financial interest in contracts they make in their official capacity.

In September, Oliva’s side, represented by Victorville attorneys Richard Ewaniszyk and Shannon Suber, filed a demurrer arguing that the suit was vague and lacked specificity and that the daughters should be excused from the suit because they were not public officials and had no contractual relationship with the city. On Nov. 16, Alameda County Superior Court Judge Robert Freedman sided with the city’s argument, advanced by counsel David Trotter of Walnut Creek, that the daughters were alter egos of NEO and that they aided and abetted Nelson Oliva’s conduct.

NEO held $3.2 million in city contracts during Nelson Oliva’s tenure as city manager, which lasted from April 2007 to January 2011. The contracts covered a range of activities such as managing the affordable housing, housing loan, mortgage bailout, business development loan, neighborhood beautification and secure mailbox installation programs. The daughters were CEO, secretary and chief financial officer of NEO, according to a 2009 filing with the California secretary of state.

Among more than two dozen affirmative defenses in Monday’s response, Oliva alleges that “Plaintiff consented to and approved all the acts and omissions about which Plaintiff now complains.”

The City Council, which has been fully replaced since December 2010, rarely questioned Oliva’s actions, routinely passing multimillion-dollar appropriations and approving contracts, including those with NEO, without discussion.

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